Hi

I am only asking this for entertainment and second guessing myself in case something I missed/forgot.

Non PBGC covered CB plan. Terminated and ready to distribute assets

6 rank&file - very small lump sums (total 30k out of 2M)

1 former owner (terminated 2021) - nowhere near 415 (120k)

2 non-owner HCEs - nowhere near 415 (700k)

1 spouse of an owner - nowhere near 415 (150k)

2 owners - not at 415 limits (1.1M but only 1M remaining - split 50/50)

Plan is underfunded by 100k. One of the owners insist that the allocations have to be made prorata as if a terminating PS plan

Plan document states "Assets will be allocated in a manner which does not discriminate in favor of Highly Compensated Employees"

Checked with document provider and they agree that this is a language corresponding to 4044 or RR 80-229.

Other than paying first 3 on the above list and then allocating the rest between the 2 owner and spouse, how else would you allocate theoretically?

Thank you for your comments

I thought I was right on this, but I'm looking at what the prior TPA did last year and it doesn't match up, so now I'm questioning myself...

MEP has immediate entry for deferrals and statutory (1 YOS/ semi-annual) for SHNEC and PS.  This particular adopting employer is top heavy by percentage but is choosing to only do the safe harbor this year.  This makes them exempt from the TH minimum, correct?  As in, those who are eligible for the deferral only (like those hired in 2022) don't need to get any allocation.  Just like any single-employer plan.

I was pretty sure of this until it came back to me that the TPA who did this calc for 2021 gave the 2021 hires a top heavy minimum for 2021 because they are top heavy (and they also did not do any profit sharing in 2021).  To me, that's an error and I don't intend to repeat it, but I figure I'd better double-check, so... is there something MEP-specific that I'm overlooking?

Thanks.

A participant has an expense that is due immediately that would qualify under a safe harbor hardship distribution.

Since payment is due, like, right now and they pay it with a credit card, can they use a hardship distribution to reimburse themselves for that cost?

I did a VCP Submission for my client and submitted it June 10, 2022. I have dutifully been calling the VCP "check the status" line every couply months or so, and continue to get the message that "the case has been assigned to an agent, don't call us back for at least another 60 days." I knew the IRS was behind, but are they really a YEAR behind? Anybody else with recent experience using VCP?

Good afternoon.  I think this is a silly question, but I just wanted to make sure I'm not overthinking it.

I know the Gateway for a Cash Balance/DC Combo Plan is 7.5%.

An employer can give more than that, correct?  The owner actually isn't taking a Profit Sharing contribution for himself.  He'd like to give the employees a little bit extra (about 10% into the Profit Sharing).  I just wanted to make sure that wouldn't cause an issue (I don't think so, since he's being more generous, but maybe I'm overthinking it).

Yes, it was 26 years ago today that Austin (one of our message boards luminaries) burst upon the scene with the release of the first movie in the series.

I have a plan where the required distribution language reads "by January 1st of the calendar year following the calendar year in which he/she attains the age of [70 1/2]".  I suppose this qualifies as meeting the RMD requirements, but it struck me as odd and wanted to ask around and see if I was missing something. Can a plan sponsor select a slightly earlier date for the RMDs and not run afoul of the rules? (They must have gotten a determination letter at some point, so it passed muster in this form.) It's an ESOP if it matters. (And I'm putting aside the SECURE 2.0 Act's updates to the ages for now.) Thanks!

My thoughts are that the primary responsibility for determining an HPE and remitting Roth Catch-Up for Highly Paid Employees is mostly a payroll function.

The TPA/Recordkeeper may be able to add processes and tools and communications to facilitate the proper administration, but ultimately the payroll companies will have to enhance their systems to accommodate this SECURE 2.0 provision.

I am curious to know where the 401k community lands on this process?

I'm having a hard time finding what I would call "clear" guidance on this, so just looking for opinions. This NOT a plan termination.

Participants terminate employment, get their 402(f) notice, and notification that if they don't respond within 30 days, they will receive a lump sum cash payment. (This would be for accounts less than $1,000.) Some of these accounts could be Roth. 

Some amount of time passes. Let's say at least until the following calendar year. I'm not at all sure proper steps have been taken (internet search, etc., etc. as outlined in DOL FAB 2014-01) to determine if these people qualify as "missing participants." "Missing participants" where the amount is less than $1,000 have a specific procedure in the plan language - basically, roll to an IRA or treat as a forfeiture.

So, these are "unresponsive" participants - they just have never cashed the the checks. Now the Plan Administrator decides to have these amounts rolled to an IRA. My question is twofold - first, is this allowable? Second, if so, or at least defensible, how to report? The distribution has already been reported, and if taxable, has been taxed.

Interested in what people perceive as a "best solution" where it appears that no solution is perfect. Thanks.

Fact Pattern:

 403(b Plan EXCLUDES employees who normally work less than 20 hours a week.

 Employee was working full time for a few years and now is on an abbreviated schedule of 15 hours a week.

 Question:

 Does this person continue as a participant in the plan?  Or are they now no longer a participant because they are in an excluded class?

Hoping someone can help.

Plan's eligibility is 2 months of service, with monthly entry

its an FTW Doc and reads, Completion of 2 consecutive months of continuous service (not to exceed 12; hours of service failsafe apply) Rolling period

i have an employee hired 10/7/2020 terminated 11/7/2020.  Rehired 10/27/2022

Trying to determine if he is eligible. 

since he worked in both Oct and Nov in 2020 does this count as his 2 months of service? 

Thank you!

Do to personal issues I have had funds in an old 401k account that needed to be rolled over when the 401k no longer existed which was over 5 years ago.  I have been in contact with the MassMutual and Empower on the funds over this time and nothing was ever stated about this being reported as unclaimed to the state of AZ.  In the last few months I have finally gotten the check issued correctly as they kept sending it with wrong pay to name.  I am working to get this in to my current employers 401k, but just received a form in the mail to fill out for unclaimed property(the 401k account) 

Any help would be appreciated on what to do next, the check is still good and not stale as received in the last few months, finished finding some other paperwork needed and completing the paperwork for my companies 401k for the rollover.  I just am not sure what will happen if they try to process the check, if it takes to long will the state take it and if I fill out the form it looks like they would pay me directly instead of being able to roll it over.  

Thanks!

LAtely the website i had bookmarked for the EOB login page is not really working anymore.  I finf that I have to google it every time, and even when I find a page that works, it seems to be a challenge to actually get to the book itself post-login.  Anyone had this problem and no of the best way to get in?  Obviously we can call ASPPA too...

Plan funds a fixed match each pay period and also has last-day rule for profit share. 

A participant terminates before year end.  

1) Are Participant wages included in eligible 404 compensation with respect to the deduction limit test?  And would it matter if they actually fund the profit share?

2) If a plan does not have a last-day rule on the match in the AA, and does not fund a discretionary match, but they have a last-day rule only on profit share, would this participant compensation be in the test?

Our plan document states a 3/31 cutoff for claims submission on DCFSA.  We have an employee that has submitted $5000 in 2022 claims after the deadline.  If we authorize the TPA to process the claims, how much liability are we creating for the organization?  I hate creating policy exceptions, but also don't like seeing an employee lost out of $5000.

making sure I grasp the ability to give 0% missed deferral opportunity for a plan with auto enrollment.

Employee rehired in 2022, and therefore eligible per plan doc to reenter plan on rehire date.

EE deferrals not started until after completing new hire requirement of 3 months worked, in early 2023.

I believe then that because deferrals were started w/in 9.5 months of failure, due to the auto-enrollment feature, no MDO required (ie 0% MDO).

We have a small balance forward 401k plan.  One of the employees died at age 49 and his wife is the beneficiary.  She is also 49.  She wants to leave the money in the plan.  Should we/must we change the name on the account to her name, rather than using her deceased husband's name?  Any other issues we should be aware of?  Thanks!!

Cross-posting from the IRA forums. 

A client has a 401k account and historically has funded a Backdoor Roth IRA (no other IRA balances). This year, he works for another company providing him a SEP IRA contribution. 

May this individual immediately rollover his SEP IRA to his 401k and still be eligible for Backdoor Roth IRAs for 2023 & 2024? He would have no IRA balances at the end/beginning of either year, but I do not know if the SEP contribution eliminates the Backdoor Roth option.